Weak Disclosures Threaten Listed Firms’ Global Funding Prospects, SEC Warns

Nigeria’s capital market regulator has issued a  warning to listed companies: firms that cannot demonstrate credible environmental, social and governance (ESG) performance risk being locked out of the international capital they need to grow.

The Securities and Exchange Commission (SEC) delivered the message on Tuesday at the Abuja launch of the inaugural Nigerian Corporate Sustainability Report, commissioned by Norrenberger Research.

Director-general of SEC, Emomotimi Agama, told participants that sustainability reporting had migrated from the margins of corporate governance to the very core of how global investors decide where to deploy long-term capital.

For Nigerian companies, he said, catching up is no longer optional.

“Nigerian companies that wish to access the vast pool of patient, long-term capital must understand one unambiguous reality: the price of entry is disclosure. Credible, consistent, comparable, and verifiable disclosure,” he said yesterday.

The Norrenberger report, which assessed 160 companies listed on the Nigerian Exchange, found that a mere 21 met the firm’s ESG criteria — a pass rate of roughly 13 per cent.

Yet those outliers exercise disproportionate market influence: they collectively account for about 67 per cent of the bourse’s total market value and have consistently outperformed the broader market index over the preceding five years, according to chief research officer, Samuel Oyekanmi, who presented the findings.

Agama described the disclosure deficit among the remaining companies as a structural challenge the market must confront together.

He said many listed firms either lack coherent sustainability frameworks entirely or publish disclosures that cannot be independently verified — a situation that makes Nigerian equities unattractive to environmental, social and governance-conscious institutional investors abroad.

The SEC chief pushed back against the notion that governance factors remain supplementary to financial analysis, arguing that a fundamental shift has occurred in how sophisticated investors evaluate risk and opportunity.

Institutional fund managers, he said, no longer apply ESG screens after arriving at an investment thesis; they build the thesis around ESG performance from the outset.

“They are no longer treating ESG considerations as filters. They are the primary determinants of capital allocation decisions,” he said.

That shift carries direct consequences for Nigeria. Agama pointed to the country’s N140 trillion capital market capitalisation as evidence of the sector’s scale — and argued that sustaining and expanding that figure requires the market to earn the confidence of international investors who apply the strictest disclosure standards.

Agama said the commission intends to act on multiple fronts, adding that it will sharpen its regulatory guidance on sustainability reporting, intensify engagement with listed companies on what disclosure obligations entail in practice, and introduce incentives designed to reward early adopters of rigorous ESG frameworks.

“We intend to strengthen our guidance on sustainability reporting, deepen engagement with listed companies on disclosure obligations, and create regulatory incentives for early adopters of robust sustainability frameworks.”

Minister of State for Industry, John Enoh, said the country faces a material gap in reliable ESG data, which he identified as a constraint not only on private investment but also on evidence-based policymaking. He called for a more deliberate effort across the corporate sector to improve transparency.

Group managing director of Norrenberger, Tony Edeh, anchored the business case for compliance in numbers. Companies that meet ESG standards outperform non-compliant peers by between 28 and 30 per cent, he said, adding that the correlation between ESG discipline and financial returns should itself be sufficient motivation for holdouts to act.

While only a small cohort of listed companies currently clears the bar, Edeh expressed confidence that a broader wave of compliance would arrive ahead of regulatory deadlines set for 2028.

The SEC’s intervention reflects broader pressure that developing-market regulators now face as ESG investing reshapes capital flows globally. Nigeria is not alone in grappling with disclosure gaps, but the stakes are particularly high for an economy that depends on external capital to fund infrastructure, deepen industrialisation, and generate employment at scale.